Report
of
Sub-group on
PPPs,PRIs and NGOs
Sub Group Members
Prof. Maithreyi Krishnaraj
Smt Deepa Jain Singh/ Smt Snehlatha Kumar
Shri A.K. Agarwal/ Smt Neeraj Suneja
Dr. Alka Parikh,
Prof Vibhuti Patel
Dr. K.S.P. Rao
Ms. Mamta Shankar
Prof. M.V. Rao
Shri R.K. Khanna
Ms. Yamini Mishra
Dr. Geetha Kutty
Dr. K Uma Rani
Smt. Sneh Wadhwa
Smt. Manju Kumari
Dr. Hema Pandey
Prof. Amita Shah
Prof. Aasha Kapur Mehta
Member Secretary
Chairperson
Submitted to:
Working Group on
Gender Issues, Panchayat Raj Institutions, Public Private Partnership,
Innovative Finance and Micro Finance in Agriculture
For the Eleventh Five Year Plan (2007 – 2012)
Planning Commission
January 2007
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Report and Main recommendations of the Subgroup on PPP, PRIs and
NGOs
I
Terms of Reference
1.
To review and assess the role of and the present involvement of PR institutions/
Local Self Government Bodies and NGOs in the implementation of agricultural
development programmes and suggest measures for making them more effective so as to
augment services to farmers
2.
To identify areas in agriculture and allied areas, suggest mechanisms for sharing
resources/ operations and work out modalities to upscale successful experiences for
public-private- partnerships (PPP)
II
Methodology followed
The sub-group met at the Institute of Economic Growth on October 4, 2006 Members
made presentations on issues within the terms of reference of the group.
A time line was decided on and members sent in further information and write ups by
around October 25-26. This draft report is based on these inputs.
The Committee has drawn on studies made of the PRIs, NGOs and P-P-Ps performance in
relation to agricultural and forest management projects in earlier plans. By way of
illustration, examples of success stories with innovative institutions
III
Report
III.1
Focus of the Eleventh Five year Plan (XI FYP)
The Eleventh Five Year Plan visualizes “ faster and more inclusive growth”. While
faster growth requires, in the first phase, that the macro fundamentals be correct,
the sustenance of this fast growth and its conversion into more inclusive growth
requires that appropriate institutions are in place to enable this growth to permeate
to the common man. Such institutions are the rules of the economic game and tell us
how the process of growth distributes the rewards that accrue from it. They may
involve the different tiers of governance, the market, the voluntary sector or even
new combinations of private, public and non-governmental institutions. The state at
different governance levels, needs to play an enabling role in this context by putting
in place the right legal and regulatory environment to enable these multifarious
institutions initiatives to come up and prosper. The report of this subgroup examines
existing roles played by Private Public Partnerships, Panchayati Raj Institutions
and Non-Government Organisations
The major challenges in the XI FYP are: a) Providing Essential Public Services, b)
Regaining Agricultural Dynamism, c) Developing Human Resources d) Increasing
Manufacturing Competitiveness e) Protecting the Environment f) Improving
Rehabilitation and Resettlement Practices, and e) Improving Governance
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It is generally acknowledged that there is a need for sectoral shift in plan priorities
with increased focus on social sectors that are in the domain of the states. In many of
these programmes, devolution needs to go further down to the third tier of
government, i.e., the Panchayati Raj Institutions. Past experience shows that
programmes in health, education, drinking water, sanitation, public distribution
system, housing and many types of rural development initiatives including the
employment guarantee programme, watershed management etc., are most effective
when there is active involvement of the local community, both in designing the
programme and in monitoring implementation.
III.2
P-P-Ps, PRIs and NGOs
There exist a wealth of institutional alternatives in India. The next section defines
these to put things in perspective.
Public-Private-Partnerships (PPPs) is a mode of implementing government
programmes/schemes in partnership with the private sector. The term private in PPP is
often understood to stand for the “private corporate sector” and includes individual
farming and other small scale enterprises. This institution has a critical role to play in
linking agricultural and allied sectors with national and international markets to achieve
the objective of faster and more inclusive growth.
The private sector could be interpreted to encompass all non-government agencies such as
the corporate sector, voluntary organizations, self-help groups, partnership firms,
individuals and community based organizations, The roles and responsibilities of the
partners may vary from sector to sector. While in some schemes/projects, the private
provider may have significant involvement in regard to all aspects of implementation; in
others s/he may have only a limited role.
Panchayati Raj Institutions (PRIs) and Departments of Government: These are the
two kinds of government institutions that the individual or the community in the village
interacts with. Though the 73rd amendment mandated a more or less uniform structure
throughout the country, variations in performance exist across states. These are due to
differences in the devolution of power and authority as distinct from delegation of
functions. At one level, the first can happen only when resources, financial as well as
human and political authority devolves to PRIs. This has happened unevenly in different
states: hence the role of PRIs in facilitating inclusive growth differs (Nataraj 2006).
Saddled with a range of functions and little resources, they are sometimes found
irrelevant by NGOs who often need to ninteract more with government departments such
as those of agriculture, irrigation and forests.
The voluntary sector or NGOs may be broadly classified as traditional, community
based and government sponsored. Traditional sector comprises the various religious and
charitable trusts dedicated to spread of education, health care, orphanages and
rehabilitation homes etc. (Ramakrishna Mission, Vivekanda Kendra. The Community
based Organizations (CBOs) comprise societies for relief from natural disasters,
neighborhood societies, micro-Credit societies (SHGs), women’s associations, wild life
protection committees etc. Government sponsored voluntary sector comprises agencies
engaged in welfare programmes such as rural development, afforestation
programmes(Vana sama rakshana Societies), watershed management, health and
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education services(Parent Teacher associations, Village Education Committees)t as well
as those engaged in research and evaluation.
III.3
Past Record and Lessons GO-NGO Collaboration.
Joint Forest Management and Watershed Development from 1990 onwards is a good
example of a sustained effort at testing the efficacy of different institutions with respect to
GO-NGO collaboration. Several institutions have been involved in these programmes.
The Union Ministry of Environment & Forests, in their Joint Forest Management (JFM)
Scheme Guidelines of 1st June 1990, enjoined on all the State Forest Departments to
involve village communities and committed NGOs and voluntary agencies in
regenerating degraded forest lands through participatory management. In 1994, the
department of land resources of the Ministry of Rural Development had circulated the
Guidelines for Watershed Development(GWD).GWD aimed to bring local communities
to the center stage and move the administration towards a facilitating role. It proposed a
user-friendly organisational structure with Watershed Associations (WAs) and
elected/nominated watershed committees undertaking field/village-level implementation
of each watershed.
The Haryali Programme from 2001 made panchayat bodies sole managers of watershed
development activities. Other institutions that had participated effectively in watershed
management were completely sidelined. Moreover, Haryali guidelines have also reduced
the budget for community development and capacity building.
Extensive studies on the GO-NGO interface have been undertaken in this context. A
recent study ( Ratna Reddy and Deshpande 2006) reviews these. The performance of
NGO implemented watersheds has been found to be better in general but a good
implementing agency is a necessary but not sufficient condition. Social and human
capital at the village level is another criticalneed.
Experience has shown that panchayat bodies have not always been efficient watershed
managers largely because they are territorial units and not ecological entities and
technically not equipped. In places where the watershed area is coterminous with the
gram panchayat (GP), PRIs have done well. However, if a GP has several watersheds,
then each watershed area should have its own Watershed Association ( WAs) This of
course depends on the resources available to the concerned people.
Joint Forest Management with participation of local communities was another initiative
started in the nineties under different D.O.s in different states. However, the
Clauses governing the setting up of the Committees often created an asymmetrical power
structure with the government department’s nominee having the power to dissolve the
Committee. This actually gave responsibility for protection to local communities without
empowering them effectively.
Joint Forest Management Committees (JFMCs) autonomy undermined by
i.
No cost sharing by JFMC in JFM
ii.
Forester as Secretary, accountable to Forest Department (FD). Secretary appoints
members of JFMC, including representative of local panchayat
iii.
Operates JFMC bank account, jointly with President
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iv.
Funding linked to number of trees whether natural or artificial re- generation
whereas people’s priority needs may be of augmenting availability of grass and nontimber forest product.
GOs in Agri-Extension
Based on experience of several NGOs (in particular the case of AKRSP in Gujarat)
It is found that Government agri-extension non-existent at village-level; it has less staff
and focuses on subsidy schemes. Oligopolies of private traders supply seeds, and inputs
on credit. This often results in, exploitation (esp. tribals), vested information. The PRI’s
play almost no role currently.
The two single most effective interventions would be to have village youth as paraworkers for agri-extension accountable to villagers through PRIs and to provide a legal
framework for input (fertilizer, seeds etc.) supply through different institutions, PRIs,
SHG federations and the private traders.
Role of PRIs



III.4
PRI as governance body; promoting sub-committee for
agriculture where no co-operatives, cbo’s and user groups
linkedSelection of Agri Para-workers by gram sabha
Holding gram-sevak accountable at gram sabha; payment
through Gram panchayat
License for Input supply for PRI,SHG federations (now only
co-op’s)
PPPs: need and forms of organisation
The need for innovative PPPs arises out of the imperative for a link up between the
markets for value addition in order to increase returns beyond those available in standard
crops and upscaling of agriculture. They can provide critical inputs by
Linking with mobile, computer companies who want to access rural markets
New crops with good markets (American corn)
Organic outlets in malls (Big bazaar)
Making competition work for farmers; greater information access
However, questions arise:
Do they understand rural realities?
Will these partnerships not be between unequal partners as farmers comprise an
unorganized group?
Should these initiatives be accompanied by a parallel mode of information provision to
farmers through PRIs and NGOs and through judicious use of IT in rural areas ?
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Some innovative institutions have emerged from recent experience which need to be
duplicated and promoted:
Partnership of the private/ public corporate sector with farmers’ federations or
community groups have emerged within the framework of profit driven initiatives
governed on business lines with a CEO/partners accountable to a Board on which the
Farmers federation, CBO’s and PRIs have representation.
One such form of organization is the Mahagrapes in Maharashtra. The Parthasarthy
Committee for examining watershed programmes (2006) came to a similar conclusion
with respect to investment.
The following organizational structure is suggested for the new P-P-Ps
Executive Partners in the Producers’ Company/ CEO of MNC
Responsible to (a) Executive Counsel made of elected heads of Farmers’
Federations/Cooperatives, Panchayat members of the region, DRDA representatives
Overall direction by Board of Directors made of the heads of the 16 member Cooperative
A legal framework within which such a flexible yet accountable structure can exist
is provided by the Producer Company Act which came into existence in 2002.
The Companies Act, 1956 (the Act), recognised only three types of companies, namely,
companies limited by shares (sub-divided into public limited and private limited
companies), companies limited by guarantees and unlimited companies. With the coming
into force on February 6 of the Companies (Amendment) Act 2002, (1 of 2003), a fourth
category, producer companies,' finds a place in the Act. The legislation enables (a)
incorporation of cooperatives as companies and conversion of existing cooperatives into
companies and (b) to ensure that the proposed legislation accommodated the unique
elements of cooperative business with a regulatory framework similar to that of
companies. The members have necessarily to be `primary producers,' that is, persons
engaged in an activity connected with, or related to, primary produce.
The Case of Mahagrapes
Mahagrapes is an export success story of Vertical Coordination (to high quality
and safety standard markets).Compared to its competitors Mahagrapes farmers
are small–Chile for example which has corporate farms. Mahagrapes was born in
1991.It owes its existence to Maharashtra State Agro Marketing Board(1984).It
received initial credit for technical and financial support.
•Marketing had a special role especially owing to the off farm disadvantages.
It is one of the first to have characteristics of both a cooperative and a firm!
•Mahagrapes farmers have gained significantly from membership Farmer size is
not a determinant in selection to membership Definite benefits accrued to small
farmers and case for replication for income augmentation for policy
consideration.
Source: Small they may be and Indian farmers they are but export they can: The
case of Mahagrapes farmers in India.
by
Kajli Bakshi (IDF), Devesh Roy (IFPRI) and Amit Thorat (IFPRI) Paper
presented at IFPRI-IEG Workshop held at New Delhi, September 2006.
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What is primary produce? In terms of the Act it is a produce of farmers arising from
agriculture including animal husbandry, horticulture, floriculture, viticulture, forestry,
forest products, re-vegetation, bee raising and farming plantation products: produce of
persons engaged in handloom, handicraft and other cottage industries: by - products of
such products; and products arising out of ancillary industries.
Community Based Organisations (CBOs) or a civil society are either registered under
Cooperative Societies Act, Trust Act or Society Act. The CBOs engaged as a service
provider to its members on profit based mostly are registered under Cooperative Societies
Act. The CBOs provide services to the members on voluntary or no loss no profit based
are registered under Trust Act/Society Act. A few civil society organisations are
registered under the Section 25 as a Non Banking Finance Corporation.Cooperatives
registered under the Cooperative Societies Act, (for Gujarat State - Gujarat Cooperative
Societies Act 1961,) which is seen as being very restrictive. The Trust or Society Act
does not permit any commercial business even for its members. The Organisations/CBOs
are autonomous organisation but obtaining permission for small change in bye laws or
any operational governance decisions is very difficult and a long process.
Producer Company in Organic Farming
The first Producer Company was registered at Aluva, in Ernakulam
district, Kerala in September 2004. This Producer Company has been
involved in the organic farming sector through explore new avenues of
procurement and marketing with the forming of the first producer
company at Aluva. A five-member Board of Directors head the company,
named Indian Organic Farmers Producer Company Ltd..
Producer Company of Watershed Associations with NGO support
Dhari Krushak Vikas Producer Company Limited, (Amreli district,
Gujarat) is the first of its kind to get registered in Gujarat. Initially
farmers of 10 villages in and around Dhari that had implemented
watershed program with Development Support Centre supporting as
Project Implementing Agency (PIA), collected a share capital of rupees
one lakh. Each of the ten watershed associations contributed Rs.10000/as share capital and started the process of registration of farmer
producer company limited and finally got the required registration on
23rd June ,2005 from the Registrar of companies, Gujarat.
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III.5 NGOs as facilitating agencies
Rural Communities, if they are to be promoted and developed as community-based
organisations, require facilitating agencies that are skilled in motivating and
organising local groups to work for a common purpose. Facilitating agencies,
preferably competent NGOs, should be selected through a rigorous and transparent
process as indicated in the guidelines to be formulated by the respective national board
of each major programme. The facilitating agencies should have a multi-disciplinary
professional team supported through financial resources. They should motivate and
organise local groups for participation in development processes and activities, thus
build up locally empowered communities.
In Watershed Development - (MoRD,) only PRIs can work as facilitating
agencies. Scope for selecting more suitable facilitating agencies even when available with
proven record is very limited.
In Joint Forest Management –(MoEF) there is no mention of the role of facilitating
agencies. The role of NGOs is mentioned as motivators without specifying their position
in the scheme and financial support.
A Non official member appointed in FDA by PRI. (Para 9.ii) In the state level coordinating committee non-official members are representatives of FDAs nominated by
Member Secretary who is a Forest Department Official.
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IV.
Recommendations
To ensure inclusive growth, to encourage value addition in agriculture and allied
activities and to promote globally competitive exports of quality agricultural products
new institutional arrangements are the need of the day. While this is important, the
persistent asymmetry in bargaining capabilities between sections of our rural
communities and the corporate sector, both public and private need to be taken note of.
The solution lies in
Providing an enabling legal environment for multiple institutions to emerge: the Producer
Company Act is one example
Ensuring that private sector companies interact in relation to marketing and technology
with federations of farmers, producers and cooperatives provide an avenue for small
producers to come together
Encouraging structures which bring together profit orientation into marketing and
production with latest technology
Ensuring that the PRI’s have financial power to back the functional delegation thrust on
them. This will enable them to perform critical governance roles with respect to rural
volunteers for extension, health and education schemes
Continuing to encourage the emergence of NGO’s which have multiple roles as parts of
information dissemination entities, watch dogs and parts of producer companies as well.
Providing an even playing field to the CBOs vis-avis government departments. New legal
provisions, in particular for forest management which donot give government
departments the final authority to dissolve or create “ joint management institutions”
Making CBOs accountable within the structure in which technical and third tier
government institutions such as PRIs and gram sabhas or tribal organizations play a
monitoring role.
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